Santos Ltd (ASX: STO) shares are taking a tumble today.
Shares in the S&P/ASX 200 Index (ASX: XJO) energy stock closed yesterday trading for $6.90. In afternoon trade on Tuesday, shares are changing hands for $6.74 apiece, down 2.4%.
For some context, the ASX 200 is just about flat at this same time as investors await the pending RBA interest rate decision.
With today's intraday losses factored in, Santos stock is down 4.1% since this time last year. Though that doesn't include the two dividends, totalling 36.6 cents a share, that Santos paid eligible stockholders over this period.
At the current share price, this sees Santos trading on a partly franked dividend yield of 5.4%.
More recently, Santos shares are down 12.0% since market close on 17 September.
As you may be aware, on 18 September, investors awoke to news of the collapse of the takeover offer lobbed by the XRG Consortium in June.
Which brings us back to our headline question.
Should you buy the dip in Santos shares?
For some insight into that question, we defer to Peak Asset Management's Niv Dagan (courtesy of The Bull).
Image source: Getty Images
Santos shares: Buy, sell, or hold?
Dagan recently ran his slide rule over the ASX 200 oil and gas stock, with a focus on the recently collapsed XRG deal.
"Shares in this energy giant were heavily sold off after the US$30 billion takeover bid from the XRG Consortium was withdrawn just days before the expected decision date," Dagan siad.
He noted that on the day that news broke, investors sent "the stock down more than 11% in a single session on September 18, 2025".
And that deal removal sees Dagan with a sell recommendation on Santos shares.
According to Dagan:
This outcome removes a key near-term re-rating catalyst and puts Santos management under pressure to demonstrate how it will deliver shareholder value.
We believe investor sentiment may remain weak as the market digests the failed transaction and re-focuses on execution risk at the Barossa LNG project and Pikka Phase 1 development.
Why did the US$30 billion takeover offer collapse?
The collapse of the US$30 billion Santos takeover by the Abu Dhabi-led consortium, which had bid US$5.62 per Santos share, came just days before most investors had expected to hear that it was a done deal.
Commenting on the withdrawal of the offer on 18 September, Santos said:
The XRG Consortium would not agree to an appropriate allocation of risk between the XRG Consortium and Santos shareholders under the SIA [scheme implementation agreement]. This included the obligation of the XRG Consortium to secure regulatory approvals and the provision of a reasonable commitment to the development and supply of domestic gas.
